investment viewpoints
Plastic wrap: from seaweed biopolymers to Europe’s new law for cutting packaging waste
Scaling up seaweed-based biopolymers, major investments is chemical recycling and the ratification of a European law to reduce packaging waste are among the developments covered in this issue of Plastic wrap, our bimonthly review of the science, policy and corporate activity pivotal in creating a circular plastics value chain.
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Team activity
The LOIM Plastic Circularity team has been busy participating in events and key negotiations relevant to our investment space. These activities, in addition to news about our latest transaction and plastics-related policy initiatives are covered in the following sections:
- Alexandre Ouimet-Storrs, Senior Investment Manager, was a judge at this years’ Go Circular startup conference in Cologne. In Go Circular’s conferences, participants discuss the main challenges to plastics circularity and collaborate on recycling initiatives. The conference covered the entire plastics circular value chain, from petrochemical companies to brand owners
- LOIM signed the Finance Statement on Plastic Pollution, alongside scientific experts, non-governmental organisations and the asset-management industry. The statement, known as the Global Plastics Treaty, was developed through the United Nations Environment Programme (UNEP). It illustrates the financial sector’s support for an ambitious, international and legally binding instrument to cease plastic pollution, and sets out what a robust agreement should include from the perspective of the financial sector
- Our team was present at the fourth session of the Intergovernmental Negotiating Committee (INC-4) in Ottawa, where the statement was formalised
- Our team will be present at industry events in London this month: Felix Philipp, PhD, Senior Research Analyst, will attend Rethinking Materials and Victoire Carous, Co-Lead, LOIM Plastic Circularity, and Alexandre Ouimet-Storrs will be at the PEI Global Impact Investor Summit. Both conferences run from May 14-15
For the latest developments in the science, policy and corporate activity advancing plastic circularity, please explore the sections below.
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Science and reports
Recycling milestone
Plastics Europe’s biennial report shows circular plastics now account for 13.5% in new plastic products manufactured in Europe. In total, 26.9% of Europe’s plastic waste is now recycled. This means that, for the first time, more plastic waste is recycled than is put into landfill – an important milestone in Europe’s plastics circularity journey.
Plastic recycling under scrutiny
Contrasting with this progress, a new report, ‘The Fraud of Plastic Recycling’, by the Center for Climate Integrity, provides an overview of the well-established technical and economic limitations of plastic recycling. It describes how the plastic industry resisted the public backlash against waste and subsequent threats of regulation by positioning plastic recycling as a key solution. At LOIM, we share the view that recycling is one of many necessary solutions to the plastic-waste crisis. Reducing plastic production and reusing plastic through new usage models are also essential.
A living income
A new study by Systemiq, with whom we operate holistiQ Investment Partners, developed a methodology to assess the living income of waste workers. To bring greater ambition to the Global Plastics Treaty and realise national plans, countries must understand of the concept of a living income and implement evidence-based recommendations from successful case studies.
This would advance the human-rights agenda and improve the resilience of the waste system, making it more efficient. The report provides a practical methodology for companies to support a living income within their supply chains.
Resource demand increasing
Rising trends in global resource use have continued or accelerated since 2019, according to the latest edition of a flagship report from UNEP and the International Resource Panel. 'The Global Resource Outlook 2024’ shows how demand for resources is expected to continue rising in the coming decades. Without urgent and concerted action, by 2060 resource extraction could rise by 60% from 2020 levels, the report warns, driving greater damage and risks.
But the report also describes the potential to correct negative trends and put the economy on a trajectory towards sustainability. For that, bold policy action is critical to phase out unsustainable activities, speed up responsible and innovative ways of meeting human needs and creating conditions that foster social acceptance and equity as these transitions take place.
Urgent action is needed to embed resources in the delivery of multilateral environmental agreements, define sustainable resource-use paths and roll out appropriate financial, trade and economic incentives. It is no longer a matter of whether shifting to global sustainable resource consumption and production is necessary, but rather how to make it happen. Addressing this, using the evolving concept of a just transition, is an essential part of any credible and justifiable way forward.
Microplastics study on harm to health
Microplastics are linked to heart attacks and strokes, according to a report in Scientific American. Plastic is almost everywhere: food packaging, tyres, clothes, water pipes and even in the air above Mount Fuji. Plastic sheds microscopic particles that end up in the environment and can be ingested or inhaled by people.
Now the first data of their kind show a link between microplastics and human health. A study of more than 200 people undergoing surgery found that nearly 60% had microplastics – or even smaller nanoplastics – in a main artery. Those who did were 4.5 times more likely to experience a heart attack or stroke in approximately 34 months after the surgery than those whose arteries were plastic-free. -
Policy, regulation and disclosure
UK Deposit Return Scheme delayed
The UK’s Secretary of State, Department for Environment, Food and Rural Affairs (Defra), Stephen Barclay, told lawmakers the 2025 Deposit Return Scheme (DRS) start date is “unrealistic” and 2027 is now “more likely”. Government discussions on the subject are ongoing. In a DRS, consumers pay a deposit when they purchase a single-use container, which can be refunded when the empty container is returned.
PPWR ultimately signed into law
Binding targets for the reuse, collection and recycling of packaging – and bans on disposable wrappers, miniature bottles and bags judged unnecessary – have been adopted by the European Parliament under a new Packaging and Packaging Waste Regulation (PPWR). The law states that the annual average volume of wrappers, boxes, bottles and cans by every EU citizen should be cut by 5% by 2030. This target will rise to 10% by 2030 and 15% by 2040. To help achieve these targets, it mandates that nearly all packaging materials must be fully recyclable by 2030.
The PPWR also introduces minimum targets for recycled content in plastic packaging. In March, it was at risk of being stalled by trade officials over a ‘mirror clause’ requiring exporters into the EU to be subject to the same conditions.
New US National Bioeconomy BoardBiotechnology harnesses the power of biology to create new services and products, which provide opportunities to grow the US economy and workforce, and improve the quality of our lives and the environment. Recently, the US launched the National Bioeconomy Board to work with partners across the public and private sectors to advance societal well-being, national security, sustainability, economic productivity and competitiveness through biotechnology and biomanufacturing.
Since the start of the Biden Administration, private companies have announced over USD 20 billion in biomanufacturing investments. This is likely to underpin a rapid expansion of biotechnology and biomanufacturing in the US over the next two decades, supporting employment and growth across many sectors.
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Corporate activity
New molecular plastic recycling facility
Eastman1 announced that its new molecular recycling facility in Kingsport, Tennessee, is operational and producing revenue. The company expects to increase production in the coming months, with the aim of generating approximately USD 75 million of incremental EBITDA in 2024 from the new facility as it seeks to build momentum in its circular economy platform.
The company’s polyester-renewal technology is applied to hard-to-recycle plastic waste that today is typically bound for landfill or incineration. The technology enables this waste to be broken down into its molecular building blocks and reassembled with the objective of becoming plastic with uncompromised performance characteristics.
Collaborative digital watermarking project preparing for market
HolyGrail 2.0 has completed its second stage of R&D research and will be deployed in commercial sorting and recycling facilities under normal operating conditions. The digital-watermarking initiative has brought together more than 130 companies and associations from across the packaging value chain.
Digital watermarks are optical codes applied with a packaging label or embossed in a mould. These ‘digital recycling passports’ include essential information such as: the type of plastics used and their composition, food vs non-food usage and stock-keeping unit.
Driven by AIM - European Brands Association and powered by the Alliance to End Plastic Waste – a technical advisor to the LOIM Plastic Circularity strategy – the project aims to understand how digital technology can enable better sorting and higher recycling rates for packaging in the EU.
JV launched for Europe’s largest sorting facility for chemical recycling
OMV1, the Vienna-headquartered producer of energy, fuels and feedstock, chemicals and materials, will work with circular economy solutions provider Interzero1 to build a sorting plant to produce feedstock for chemical recycling. OMV will invest more than EUR 170 mn to build the facility in Walldürn, south Germany and will hold 89.9% of the shares in the joint venture, with the remainder owned by Interzero.
OMV claims the plant will process 250,000 tonnes of mixed plastics per year, focusing on converting waste that cannot be mechanically recycled into pyrolysis oil, a feedstock used in chemical recycling. With five sorting plants for lightweight packaging waste in Germany and the capacity to collect about one-third of the nation’s lightweight packaging waste, Interzero has the largest sorting capacity in Europe.
Circular textiles pioneer goes bankruptIn a major blow for the growing circular textiles industry, Renewcell1 filed for bankruptcy in Stockholm after being unable to secure sufficient financing. The pioneering Swedish company started the first 100% textile-to-textile recycling plant to produce regenerated Circulose fibre but subsequently struggled to build capacity from corporate offtakers.
The company met with its largest shareholders, H&M and Grindus, as well as existing lenders including BNP Paribas, the European Investment Bank and Nordea1, but the negotiations did not achieve a financing solution.
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Investments and deals
Cyclize raises USD 5.4 mn by UVC Partners
The ClimateTech venture from Stuttgart has attracted EUR 4.75 mn in startup capital to recycle mixed plastic waste into a synthetic gas that can be used instead of fossil fuels in the chemicals industry. The funding round was led by UVC Partners, with complementary investments from High-Tech Gründerfonds, Aurum Impact, UnternehmerTUM Funding for Innovators and high-profile business angels.
Sway aims to scale seaweed-based packaging after USD 5 mn seed roundFollowing a seed round led by Third Nature Investments, US firm Sway has announced the development of a biopolymer resin designed to replace flexible plastics. Thermoplastic Seaweed resin (TPSea) is a 100% biobased, home-compostable, microplastic-free material made from a natural, regenerative ocean plant. Intended for uses such as retail bags and food wrappers, TPSea can be integrated with scaled plastic manufacturing systems, Sway claims.
Circular.co nets USD 10.5 mn to scale platform for sourcing recycled materialsCircular.co aims to expand two technologies – its database of post-consumer recycled (PCR) materials and the accompanying platform for buying and selling PCR goods – after securing the funding from Maniv, Oxygea and Eclipse. The San Francisco-based firm will expand its team, cover more sustainable materials, keep adding companies and suppliers, and increase the scale and improve the functionality of its platform.
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